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Secret #1 - Clarity PDF Print E-mail
Written by John D. Buerger, CFP®   
Sunday, 23 December 2007 22:56
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Secret #1 - Clarity
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“When your values are clear, your decisions are easy.” – Roy Disney

If you want to keep more of what you make, you have to find a way to spend less than you make.  No matter what happens on the income side of that equation, keeping expenses in check is the key.  This would seem to be pretty obvious, right.

So why is it that so few people actually manage to get control of their expenses?

The answer lies in the complex chemistry of the brain.  Hundreds of fascinating studies continue to be done which identify exactly which parts of the brain are firing under various conditions.  Often chemicals like dopamine or estrogen are released as well.  Read Daniel Goleman’s book, “Social Intellegence” or “Your Money and Your Brain” by Jason Zweig.

In short, we are emotional creatures.  Most people spend money emotionally without restraint.  Rational logic does not have the chemical firepower to subdue the dopamine fix that you get from a good round of “retail therapy.”  Add to this mix thousands of advertising impressions each day showing us all the cool new gadgets that we just can’t live without and … well, we feel as though we just can’t live without them.

DON’T TRY THIS ALONE

Example: You already have a 32-inch color TV that works fine.  You don’t need another TV.  You can still get all the news, sports and movies with the equipment you have (and it’s paid for).  That’s great logic.  It also gets thrown out the window the next time you are at Best Buy and faced with a massive wall of flat screen TV’s.

“I don’t need it, but that 47-inch LCD HDTV would sure look good on my living room wall.  Sure, it costs $2000 and I only have $500 in savings, but if I get that TV, I could get rid of that ugly shelving unit.  So what, I’d have to find (and pay for) new shelves to hold all my DVD’s and books and other stuff that’s stashed in there.  I WANT THAT TV.”

You can feel the dopamine rush.

There are very few ways (short of locking up your credit cards and checkbook) to overcome the impulses that have been a part of our species for 20,000 years, but there is one aspect of your character that can help you – YOUR VALUES.

VALUES – A DIFFERENT KIND OF CHEMISTRY

Your Values are the things in life that are truly important to you.  Values range from superficial stuff and posessions to more esoteric (your life mission) and spiritual concepts (divine purpose).  Commonly cited higher values are Integrity, Honesty, Relationships, Supporting family or friends, Charity, Pursuing a Purpose, Freedom or Unconditional Love.

We all have values at all levels.  Your values were instilled in you at a very early age.  Most people have yet to explore their higher values.  When I start coaching clients, most say they have never talked about their values with anyone (including their spouses), but they have thought about them from time to time.

Expressing your values can generate a tremendous emotional response.  When we do Values Clarification Exercises with coaching clients, they will often cry, laugh or smile uncontrollably (I should own stock in Kleenex).  So your values build a powerful emotional framework that gives you a different way to look at a purchase decision – one with an emotional pull that is almost equal to the dopamine fix of the impulsive buy.

Example Revisited: We can’t get rid of the emotional pull of all those flat-screen TV’s screaming at you to take one home and put it up on your wall.  But now your $500 in savings has more value to you, because you can see how it can help you get something that is REALLY important to you – college education for your daughter, night school for you, a special gift to the homeless or a way to help someone you love.

THE WEALTHY ALMOST ALWAYS KNOW THEIR VALUES

I’ve lost count of the wealthy people I have met who still drive around in 10-year-old pickups.  To a person, they all know what is important in life to them and they make their decisions based on those values.  As a result, they have less stress and fewer worries.  They are more “centered” and less judgemental.  In general, they are the most generous, kind and giving people I know.

The best part is – they enjoy their lives to the fullest.


Last Updated on Tuesday, 27 January 2009 16:08